Mass. Senate Draft Bill Keeps 12 Percent Marijuana Tax

The marijuana tax rate in Massachusetts would remain capped at 12 percent under a draft bill released Friday by the state Senate.

That's the same rate as in the ballot question that was approved by voters in November. It's in sharp contrast to the 28 percent tax rate in a House bill -- although that legislation is being revised.

Pat Jehlen, Senate chair of the Marijuana Policy Committee, says her chamber's bill stays with 12 percent for two reasons.

First, because it's the rate approved by voters. "One of the problems we face in this country is a lack of trust in government," Jehlen said. "The Senate bill preserves the will of voters."

And, says Jehlen, raising the tax rate would fuel the existing black market. "The illegal market thrives if there are high taxes and low access," she said.

To fix the "low access" problem, Jehlen says the Senate would not agree to delay the opening of retail marijuana stores beyond the current date of July 2018. But there are lots of hurdles on the path to that date.

The House and Senate have set July 1 as their deadline for getting a bill to Gov. Charlie Baker. That's because it's expected to take a year to create the new Cannabis Control Commission (CCC), set up regulation of products and packaging, and review retail sales applications.

Now, as major differences between the House and Senate bills emerge, meeting the July 1 deadline may be difficult.

In addition to their sharp differences on the tax rate, the Senate does not agree with the House on another contentious issue: who gets to decide whether cities and towns can ban the sale of legal weed. The Senate draft bill again follows the ballot question, which said municipalities must put the question to a full local vote. The House, under pressure from municipal officials, gave leaders the authority to decide if retail stores would be allowed within a city or town.

Municipal leaders say they will continue to push for this change and they argue it would be benefit all sides. Geoff Beckwith, executive director of the Massachusetts Municipal Association, says that if cities and towns have to wait for an election, they are more likely to approve a moratorium on retail sales.

"The roll-out of the industry will be delayed for a longer period of time if this referendum problem is not fixed by giving the power to the local legislative body," Beckwith said.

Beckwith says many cities and towns don't want to ban sales outright, but might want to limit where stores could be located or how many a town would have. These are typically zoning issues, not the subject of a ballot question.

The Senate bill is expected to add language that would seal criminal records for those convicted of marijuana violations that would no longer be crimes in an era of legal marijuana. The first draft of the House bill did not address this issue.

The Senate is in general agreement with the House on some items. Both propose adding two members to the CCC, bringing the total to five, and both would move oversight of medical marijuana from the state Department of Public Health to the CCC.

The House chair of the Marijuana Policy Committee, Rep. Mark Cusack, said these differences between the House and Senate are no surprise.

"For months now we've been in 80 percent agreement on the issues, and we knew early on the major differences were on [criminal records] expungement, taxes and local control," Cusack said. The House released its draft, he added, "knowing we were not going to get consensus on everything."

But tension between the House and Senate is palpable. Jehlen, in a briefing on the Senate bill Friday, repeatedly and pointedly declined to discuss the House legislation. She said she'd heard Cusack had called a meeting of the committee but had not been invited directly, herself.

Supporters of the ballot campaign to legalize marijuana are clearly aligned with the Senate.

"Until we see the full bill from the Senate it's hard to comment on everything that's in it, but at this point we think they get a number of things right," said Yes on 4 spokesman Jim Borghesani. "The House bill, even with its most egregious flaws addressed, adopts a hostile approach that would not serve any system of commerce well, much less the fledgling legal marijuana market."